Interview Series – Darren Marble, CEO of Issuance

Interview Series – Darren Marble, CEO of Issuance

I recently had the pleasure of interviewing Darren Marble, CEO of Issuance. Through his role as CEO of CrowdFundX , Darren has extensive experience marketing Reg A+ IPOs and Digital Security Offerings to institutional and retail investors. This experience perfectly aligns with Issuance (a platform that connects digital security issuers with investors) as Darren knows what investors are looking for, and what is needed for a successful and compliant offering. Check out the interview below to learn more about Issuance.

RS: Can you tell us a little bit about what Issuance does and the long-term vision?

DM: Issuance is developing a technology-enabled investment bank for digital securities issuers–a modern Goldman Sachs. Our vision is to be the leading investment bank for digital securities, which we believe is the next mega-trend in capital markets.

We believe in regulated markets, investor protection, and are confident that the U.S. will be the leading market globally for digital securities.

RS: Issuance recently announced the acquisition of CrowdFundX, how will this acquisition be integrated with Issuance?

DM: Issuance has executed a Letter of Intent (LOI) to acquire the assets of CrowdfundX (CfX), a FinTech marketing firm known for marketing some of the industry’s most notable digital securities offerings (DSOs) and Regulation (Reg) A+ IPOs. Some of CfX’s clients include Drake’s Virginia Black Whiskey, KODAKOne, and tZERO, among others.

The dominant investment banks of the future will effectively blend digital securities technology with traditional financial services. Issuance at its core is a technology company, while CfX is a services company with notable industry clients and established revenue streams. As such, CfX is a natural acquisition for Issuance.

The transaction, which is expected to close in February, 2019, will be subject to due diligence and definitive legal documents acceptable to all parties. Once completed, the CfX brand will be sunsetted, and Issuance will be the enduring brand.

RS: How is your platform different from similar issuance platforms like Securitize, for example?

DM: Issuance is in the business of deal marketing and capital raising, which is the biggest pain point in the market. We act as a bridge between tokenization platforms and secondary trading platforms, since neither of these players are true capital raisers.

In September, we announced a strategic partnership with Securitize to give their clients exposure to the right network of investors and increase their likelihood of funding. Conversely, Securitize offers a proven tokenization solution for our clients, who require a proven compliance solution for the trading of their digital securities.

RS: How does Issuance market to potential investors?

DM: Issuance is developing an app that will allow issuers to market their deals directly to authenticated, interested investors. Issuers will pay a fee to Issuance each time they send a message to an investor on our platform, with the fee varying based on the type of investor messaged. For instance, a message to an institutional investor will carry a higher fee than a message to an accredited investor.

Issuance is in the process of partnering with a broker-dealer, which will allow us to capture success fees when investors sourced through Issuance invest into a deal.

The Issuance app is expected to be available in mid 2019. In the interim, we are selling traditional advisory and marketing contracts where Issuance serves as an introducer between our issuer clients and our network of investors. We have trusted relationships with some of the most active digital asset investors around the world, and have successfully sourced capital through this model for multiple clients. Our advisory and marketing engagements are sold in a fee-for-service model where Issuance is paid a flat fee month-to-month.

RS: Your website notes that Issuance “provides unique incentives for investors”, can you tell us what incentives Issuance offers that sets it apart?

DM: Investors generally want access to the best deals in the highest discounted rounds. Issuance has access to some of the industry’s most proprietary, desirable deals, which is an incentive for investors–particularly institutional investors and digital asset funds–to work with us.

As an example, we just signed a NASDAQ-listed biotechnology company running what it believes to be a historic digital securities offering (DSO). The company has a $250 million market cap and has been publicly traded on NASDAQ for more than a decade. This is one of most unique DSOs in the industry, and Issuance has exclusive access to the deal. The initial reception from our investors has been incredibly positive, and will further credentialize Issuance as a firm with true proprietary deal flow.

RS: Issuance “allows investors to only receive certain deals”, can you tell us how this works and how it is beneficial to investors and issuers?

DM: The problem with current platforms is that they are issuer-focused, and they market every deal they take to every investor in their database. Moreover, the majority of investors on these platforms are self-directed retail investors. This approach has resulted in a lose-lose-lose scenario for issuers, investors, and platforms alike. It’s one of the big reasons no equity crowdfunding platforms have had any real success to date.

Our strategy to solve this problem is counterintuitive, yet simple: Issuance will solve for investors first. Our app will cater to investors–the most sought-after segment of the market–and ensure that we protect both their privacy, and, more importantly, their time.

The Issuance app will gather investor profile and deal preference information up front during the sign-up process, which can be completed through the app itself, or through our institutional sales reps who will input profile information on behalf of investors.

By gathering profile and preference information up front, Issuance knows what deals investors are interested in seeing, and what deals they have no interest in. When an issuer pays a fee to market their deal to an institutional investor, for instance, that deal will only be sent to an investor who has explicitly expressed interest in that type of deal.

Think of it as a matching technology. By better matching the right deals, to the right investors, at the right time, we increase conversion, and everyone wins.

RS: Can you tell us some more about the ranking system that exists within the platform?

DM: We are developing an algorithm that we can share more about when we launch.

RS: What is the most important criteria you can recommend to issuers to achieve a high ranking within the platform?

DM: Issuance is focused on working with established businesses and publicly traded companies. Ultimately, issuers whose deals are the most highly de-risked, and offer the most fair and compelling terms to investors, will have a higher ranking on our app.

RS: Issuance offers aftermarket services, can you tell us a bit about those services and the benefits?

DM: Issuance offers aftermarket support services for issuers who successfully raise capital and list their digital securities to a secondary trading platform. Raising capital is only half the battle: issuers must continue to aggressively market to investors post-raise in order to increase the visibility, liquidity, and market cap of their digital securities.

Aftermarket support is one of the most overlooked yet critical services that digital securities issuers will need to succeed long-term. Issuance currently offers aftermarket support contracts with 6-month or 12-month terms, with our 12-month terms offered at a slight monthly discount.

RS: Is there anything else you want to share about your project?

DM: Issuance is currently raising our own round of capital, and some of our current and committed investors include Alpha Omega Capital Partners, Slim Ventures, Proactive Capital, and Business Instincts Group, to name a few.

If you’re looking to invest in the digital securities ecosystem, and want a company with a proven team, traction, and revenues, I’d say we’re a great bet–and our investors would agree. To access our complete investment package, please visit www.issuance.com.

Interview Series: Liza Aizupiete, Managing Director of Fintelum

Liza Aizupiete is the Managing Director at Fintelum, a European-based token launch (ICO and STO) platform. Liza has extensive experience in traditional fund management, and is also an experienced blockchain entrepreneur, having successfully launched and raised capital (ICO) for Globitex where she was a Co-Founder and Managing Director.

RS: You’ve recently launched a company called Fintelum, can you tell us a bit more about what Fintelum does and what markets it serves.

At Fintelum, we built a token launch platform to cater to token issuers in carrying out technically sound and compliant ICO/STO token sales. Fintelum is geared to provide services on the European soil for global clientele. The main services are compliance, crypto funds co-custody, and smart contracts. For security token industry, Fintelum serves as a token ownership transfer agent, ensuring secondary market by token OTC desk and provides ongoing blockchain-based corporate action services, such as voting, dividends and announcements.

Fintelum was founded in 2018 and subsequently licensed by the Estonian FIU to provide services for crypto industry in compliance with EU AML laws. The main differentiators lie within the benefits Fintelum clients can have from a longtime team with experience in finance and building and running our own regulated cryptocurrency exchange.

For one, Fintelum features multi-currency cold/hot wallet management system with co-custodianship for added reliability. Issuers can be reassured that all technical, blockchain and compliance related work will be carried out with utmost care. For that we have built a comprehensive backoffice, where issuers can safely navigate and control their fundraise. From creating campaigns and programs to managing investor data and affiliates.

Another differentiator is our Ethereum based security token STO implementation and subsequent OTC desk. Fintelum is able to act as a token transfer agent, maintaining blockchain based capitalisation tables or shareholder registry for companies or other tokenised assets. We are creating unprecedented availability for eligible (whitelisted) peers to exchange both security and utility tokens.

For utility token, Fintelum differentiates with our systematic approach in KYC/AML compliance. There, after a successful fundraise, the issuers can rely on a comprehensive reporting system. All data collected and verified can be made available to banks and other financial institutions that would otherwise be unable to service a non-compliant enterprise. In fact we have several banks and payment service providers that can offer fiat services to Fintelum clients.

On the whole, Fintelum services pack-in some of the most crucial features to successfully launch a crypto fundraise. The issuers will still need to have their own local legal counsel and have a clear idea of their own marketing strategy, whereas Fintelum will do the rest. It is safe to say that Fintelum service package is the most comprehensive available on the market.

RS: You have extensive experience in fintech and funds, what reasons did you choose to start a token issuance company instead of some other type of crypto service or business?

LA: In short: – Companies sought our know-how – Understanding of the industry and technology – Anticipation of the global change in the capital markets

After having successfully completed a EUR 10 million ICO fundraise, for our former company, several projects approached us to learn how crypto crowdfunding works. And as compliance and AML took precedence over anonymous crypto donations, we thought it natural to expand on our experience and institutional understanding how the capital markets will likely evolve. ICOs or utility tokens already made a historical mark on capital markets industry. Likewise, STOs or security tokens will continue reshaping capital markets and we are excited to precipitate this change with our new business.

RS: You previously did an ICO with your former company, Globitex, what did you learn from that ICO that can help token issuers on the Fintelum platform?

LA: Our advice: – Find the right partners – Work with professionals – Grow your community

Our major takeaways from running an ICO was that it matters a lot at what stage your company is, what shareholders and partners you have and which service providers you choose for your fundraiser. You may have a wonderful idea, technically impeccable product. But you need professional service providers that will do everything else for your fundraise to actually happen.

We were very lucky with ours. We managed to raise EUR 10 million and closed our public sale in a matter of 24 hours. Not discounting the timing when we ran our campaign, it is also important to have a clear idea of whom you want to target as your investors and/or product users – your community. Because an ICO as well as STO campaign works inadvertently as a marketing campaign for your current or future product or service. And you need to invest the time and effort to reach out to your community, to show the world that your product exists and is worth investing in.

It is worth noting that STOs make more legal sense, but much less retail buzz. The times of raising hundreds of millions for a white paper ideas with no hard cap are definitely gone. But ICOs are not dead. I still anticipate some major utility tokens to be released this and next year. STOs on the other hand can work beautifully under crowdfunding law exceptions up to EUR 5-8 million, and above – according to the Prospectus Regulation (in July 2019 replacing the Directive) in Europe.

For the ICOs a fixed and guaranteed hard cap will add to the success and popularity of the fundraiser. With STOs, hard cap is replaced by clear legal rights and expectations.

RS: What types of companies do you think are best suited to launch an STO?

Today, the potential buyer of an STO will need to overcome burdensome KYC/AML profiling process to be compliant with the sales of a security. And depending on the jurisdiction and the project offering, the pain levels may vary. But it is clear that investing in an STO or ICO today is much more complicated than just a year ago would have been, contributing towards a development of a utility token project. This is why the STO must be attractive enough an offer for the pain of investing. Indeed, for equity or debt tokens, an STO issuer needs to have a great proposition on the table to be able to attract investment.

RS: What types of companies would you personally like to see launch in the cryptocurrency space to help the industry as a whole reach wider adoption?

LA: I’d bet on: – Sports and games – Virtual reality – Food

At Fintelum, we get disproportionally more enquires from real-estate related companies than from any other sectors. This is presently the case. And it may be due to the fact that real estate is a hard asset. Like commodities, precious metals, real estate is something people understand. Investing in complex equity schemes may require more sophistication and/or risk appetite. Whereas I would personally like to see utility tokens continue to persist. We have come across several great ideas. But the fear of the present downmarket poses resistance and unwillingness from the managers to delve into the process of launching a token.

The three categories, namely sports/games, VR and food industries are most appropriate for ICO type of fundraise, because of the loyal retail client base they all either have or have the potential of commanding. Finance as a sector has already been done, with caveats. It brought about institutional interests, and serious price volatility as a result. But, by tapping into the mass market though either of these industries, we may be able to sustain a steady and solid adoption rate.

RS: You’ve been a female entrepreneur in the cryptocurrency space for over three years, can you tell us about any benefits or challenges being female in a male-dominated field may have brought?

LA: I was born in Latvia and educated in Switzerland. According to Open Knowledge report by the World Bank, six economies—Belgium, Denmark, France, Luxembourg, Sweden and topping-off with Latvia —score 100 in the Women, Business and the Law index, meaning they give women and men equal legal rights in the measured areas, whereas Switzerland scores just marginally below at 97.50. In fact Latvia has the highest proportion of female executives in the entire EU, according to the latest EuroStat survey.

This shows that generally women should not be experiencing any difference or special challenges in the developed world economies. And it is no different in the nascent crypto space. Although the industry is predominantly male, the rules are the same for both genders. Hence, I have not felt particular challenges being a female entrepreneur. Indeed, the only challenges are mostly self imposed. This is because, by some gender bias, females tend to be more critical, especially of themselves. So, if anything, the challenges are self inflicted and are completely unrelated to external factors.

RS: Can you describe briefly what you think the next two years looks like for ICOs and STOs.

LA: The coming years will be a slow recovery from the ICO exuberance that culminated in the years 2017-18. It will be a recovery and maturing of the cryptocurrency and crypto assets industry, where STO will have an important place, setting precedents across jurisdictions.

ICOs had reached unprecedented 10-fold returns on investment, raising in excess of USD 20 billion in funding, in the years combined. The crypto fundraising will continue, but it will happen in a more professional way; more law-abiding manner; hopefully, innovative at the same time.

It would be unfortunate, if the law makers decided that we don’t actually need innovation, and that the existing system is good enough as it is. My hope is that competition will increase, and the barriers of entry will not be disproportionally raised. So the new entrants and innovators can have a chance of their lifetime to actually make the word a better place.

RS: Is there anything else you would like to share with the readers?

LA: To inaugurate the launch of Fintelum services, I invite potential token issuers to take part in our Easter arrangement. From 21 March to 21 April 2019, Fintelum will wave half the onboarding fee to all eligible token issuers who come through during this time.

Sebastiaan Lichter is the Founder and Chief Product of Blockport. Blockport is an abbreviation for “Blockchain portal”, providing everyone access to the world of cryptocurrency and blockchain.

AT: Blockport connects ‘social’ with ‘trading’. For our investors who are not familiar with Blockport, can you share with us the trading and social features that Blockport offers?

SL: Our core vision is to bridge the traditional world with this new digital economy of cryptocurrencies by focussing on user-friendliness, safety, transparency and liquidity. However, change in society cannot be forced. Therefore, we need to educate people by creating streams of entertaining and compelling content.

By combining the worlds of social media and trading, we offer our users a new and unique social trading experience that intuitively facilitates a knowledge-sharing community.

Blockport’s unique social trading features allow people to follow and copy each other directly on the platform. This way beginners can learn from experienced traders and experienced traders are incentivised to share their knowledge with beginners, because they can earn Blockport tokens (BPT) as a reward.

Experienced traders can create a public ‘lead-trader’ profile on Blockport, just like influencers do on Instagram or Facebook, and share their portfolio, trading activities and insights with followers. If you want to follow an experienced trader, you’ll compensate him by paying BPT.

The general idea of this model is to incentivise both beginners and experienced traders to use Blockport as their main cryptocurrency trading platform and stimulate them to engage and share knowledge with each other.

AT: How many countries do you support, and where do most of your users originate from?

SL: We currently support 39 European countries and 16 countries outside the EU, but most of our users come from the western European countries such as the Netherlands, UK, Germany, Scandinavian countries, Italy, Spain, France, Belgium, etc.

However, starting in February 2019, we will open our doors to a total of 150 additional supported countries outside the EU.

AT: What’s your timeline for onboarding United States customers?

SL: We aim to open our doors to the first US states in Q2 this year. This month we’ve secured a new banking partner that allows us to accept and process USD currency.

AT: You currently have a utility token, the Blockport Tokens (BPT). What’s the utility behind this token?

SL: The BPT has two core utilities. The first is that it is used for accessing and using the social trading features. The follower has to pay the lead trader a certain amount of BPT to follow or copy his trading activities.

The second utility is that it grants users a certain amount of discount on trading fees.

AT: When it comes to listing new tokens on Blockport, how is this decided? Is this based on a voting system?

SL: We process both normal listing applications through our future listing application, as well as accommodating to the demands of our user base and community. We recently launched a voting campaign in which Electroneum (ETN) came out on top, and we’ve got Stellar Lumens (XLM) up next on our list.

In general we base our decisions on several factors, which also includes a due diligence process on the token and team behind the project.

AT: Blockport is launching an STO in March, 2019. Could you tell us both the soft cap and hard cap?

AL: For the first round in March 2019 the soft- and hard cap are planned tobe 1M Euro and 5M Euro respectively.

AT: Participants in the STO will receive Blockport Securities (BPS). Each security token represents a ‘depositary receipt’ or ‘certificate’. What benefits do these tokens offer investors?

SL: BPS represent an indirect ownership stake in the Blockport company. The BPS token grants owners no voting rights, as these vest with the intermediary issuing the BPS’s, but will enable the token holder to profit from dividends payments paid-out by Blockport to its shareholders and to profit from the increase in value of the business of Blockport overtime.

AT: On January 24th, 2019 you officially moved out of Beta. How has the market reacted?

SL: Very positive! We’ve received a lot of positive feedback from our users and the community. People really love to finally use our platform and are happy about the seamless experience when trading their favorite cryptocurrencies. The next step besides the new Bitcoin (BTC) deposits, is to also support Ethereum (ETH) and Blockport token (BPT) deposits, which is high on the wish list of our users.

AT: Is there anything else that you would like to share about Blockport?

SL: Very exciting times ahead of us! We’ve put a lot of time and resources to build the core Blockport platform from scratch within a year, and that’s a big milestone for the team, we are very proud of that.

The coming year will allow us to expand our platform’s usage and global accessibility by adding a lot of exciting new features such as social trading, advanced trader tools, additional fiat currency support and new listings.

Next to that, we’re also working to expand our business relationships with credible projects in the ecosystem that can reinforce our vision and mission to create a win-win scenario.

Interview Series – Dana Farbo, COO of Augmate

Dana Farbo is the Chief Operating Officer and an investor in Augmate. He is driving growth and building the ultimate platform for device management for the Internet of Things (IoT). Using distributed ledger technology, Augmate brings better control and security for the billions of devices in use by enterprise and consumers.

AT: Augmate started in 2014 and was one of the first companies to offer IoT device management. Could you tell us how you got started?

DF: Augmate began as a Google Glass at work partner to help make the introduction of Google Glass in enterprises work well. We became one of a select group of 10 companies certified by Google to provide solutions for this new technology. Rather than focus on consumers, we saw the use on manufacturing floors, logistics and in other businesses as being the best use cases for the growing head-mounted-wearable business.

AT: In 2015 you introduced the Augmate Wearable Environment Manager (WEM). What is this exactly?

DF: W.E.M. is a centralized platform for IT management to control and command the head-mounted-wearable devices that they were putting on their networks. There wasn’t anything in market that could help these companies deploy and manage for things like over-the-air updates, permissioning to the right user at the right time, security for the devices including the ability to individually lock and manage content and much more. W.E.M can be used as a SaaS or as a server based on-premise solution. IT has the full control of the devices through the platform because we work with equipment manufacturers of wearables to have them sign our code and the code to be placed at the core of the device.

AT: What are some of the more popular use cases for WEM?

DF: View this link for detailed background information. The easiest is in remote worker support:

Companies around the globe are leveraging their distributed work forces by giving them technology such as head-mounted wearable computers with video and audio capabilities. Imagine a worker who is repairing a generator in the field but needs expert help that may be located 1000 miles away. By using a wearable device with a camera and audio, the worker can keep both hands free to work while a support person guides them by seeing-what-they-see. Augmate is the layer of device management and control that enables these devices to be managed remotely and updated effectively so that there is not an interruption in their usage. Augmate gives addition capabilities to the management staff such as automatic wifi connectivity for approved networks, restricted access control so that only the workers allowed to use them are able to log in and much more.

AT: Could you tell us about Augmate Connect?

DF: Augmate Connect brings a new paradigm to device management. It is built using an open architecture framework to allow for unlimited device types to be added to it for management. It can be “plugged” into other systems to extend their capabilities using API’s or built upon using a SDK so that additional components can be added from a community of developers. It is built with the ability to integrate blockchain and distributed ledger technology without being locked into any single solution. This flexible framework is the key to a solid foundation that can extend over time and scale to unlimited potential.

AT: How does Augmate Connect keep IoT devices secure?

DF: Security is both built in and supported via add-on technology. Security can range from the types of encryption for data during transmission to use of blockchain and device identification on the blockchain. As stated, 3rd party integrations such as network health can be done with single dashboard monitoring. Policies can be written to give management the opportunity to write security protocols directly to the system. Security is core to the Augmate Connect framework planning and implementation with all effort focused on maximizing protection and minimizing disruption.

AT: Since Augmate uses the blockchain, what makes this more secure than using a database?

DF: Blockchain holds the promise of a scaling, decentralized environment where secure authentication is paramount. Centralized databases can be breached, and, in many cases, this is due to human error in password management. Hacking can also penetrate via known or unknown vulnerabilities. Blockchain can still be prone to human error but the vulnerabilities of direct hacking are lessened considerably due to the way transactions are validated.

AT: In 2017 you successfully completed a proof-of-concept with IOTA. Will this be the blockchain that is used on a going-forward basis?

DF: Augmate is an OS and blockchain agnostic platform. We are evaluating and using several technologies based on use-case need. IOTA holds the promise of scale and no or minimal transaction costs. Other DLT technology is being developed that are purpose built for IoT.

AT: Augmate was initially wrestling with the idea of launching an ICO versus an STO. What swayed you to raising via an STO?

DF: It became clear during early 2018 that SEC guidance was indicating a need for companies to consider an investment raise using tokens to be compliant with securities laws. Augmate has customers, employees and shareholders and it was important that we not put any of those at risk by trying to force a new way of thinking about investment raises based on a desire to be an ICO versus a STO. Our own team debated this many times as the advantages of an ICO were enticing. However, we took counsel’s advice and the common sense approach that led us to making sure we were doing everything possible to protect our stakeholders while participating in the new area of investing that we feel will continue to grow.

AT: You have an impressive list of partners which includes Toyota and UPS. Could you tell us more about these partnerships?

DF: Partnerships are the basis for our growth strategies. We have strategic investors and customers such as UPS and we have application partners that showcase us to their customers. Hardware partners allow us to dig deeper into what helps them succeed while we prepare the future solutions to maximize their impact. We are all in this IoT ecosystem together and our belief is that by making our partners stronger, we become that much stronger ourselves.

AT: Is there anything else that you would like to share about Augmate?

DF: Augmate has built a world-class team and we have some of the best customers in the world. We are excited to be a leader in blockchain and DLT and focused on providing solutions for managing the massive opportunity that IoT is bringing to enterprises.